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When do profits become due in Mudarabah partnership agreements, and can advance payments be considered part of the capital?

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Profits in Mudarabah partnership agreements do not become due until the capital is fully recovered. Any amount paid before the full recovery of capital is considered part of it, especially if the contribution is to an activity not legally licensed, as it is not permissible to approve or legislate the...

Profits in Mudarabah partnership agreements do not become due until the capital is fully recovered. Any amount paid before the full recovery of capital is considered part of it, especially if the contribution is to an activity not legally licensed, as it is not permissible to approve or legislate the practice of fundraising and contribution without a license.
Source: Radiif.com (رديف) · Saudi Legal AI Platform

Legal References & Citations

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Saudi Law - Article

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